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Your 2012 Bernal Heights Real Estate Year-In-Review

Yesterday, our Interweb neighbors at CurbedSF told us about a 1 bath, 640 square-foot fixer-upper on Manchester Street in Bernal Heights that was listed recently for $399,000. It ultimately sold for $685,000 — a mind-boggling $286K over the asking price. What to make of this?

Viewed in isolation, stories like that can make you dizzy. (In a good way… or, maybe not.) Don’t dwell on it. The trend that matters most is what happens to the overall Bernal Heights marketplace over a longer period of time. So for that, I asked our friends at Downing & Company to pull together a year-end summary of the Bernal Heights real estate market in 2012.

The data in 2012 looked pretty good for existing homeowners in our geographically sexy stretch of San Francisco:

For the most part, the theme of the year was reduced inventory levels and cheap debt. With these factors, home prices in San Francisco rapidly appreciated. This was even more pronounced in the popular central neighborhoods of the Mission District, Noe Valley, and Bernal Heights – the preferred ‘hoods of many tech employees. With the Facebook IPO and new hirings this year in the City from Twitter, Zynga, Yelp and other social network companies the competition for homes heated up. In Noe Valley and the Mission District neighborhoods things quickly got out of hand with multiple offers and bidding wars producing a spill over effect into Bernal Heights. While price increases were not as dramatic in Bernal Heights, the charts below reveals some decent lift.

Here’s how that dynamic played out on a neighborhood-by-neighborhood basis for single-family homes:

Executive Summary: Noe was insanely ridiculously crazyhot, the Mission social-climbed upscale, and Bernal turned in some rather impressive results.

The story gets even clearer when you look at the sales picture for Bernal single-family homes in isolation:

The bottom line? For single-family homes in Bernal Heights, prices increased by 17.9% in 2012. The story was similar for condos, with Bernal condo prices increasing by 13.5%.

Again, this may be a good thing or a bad thing, depending on which side of the homeowner fence you sit on. We understand. Yet those are the facts (and just the facts) told to us by the aggregate home sales data for 2012.

7 thoughts on “Your 2012 Bernal Heights Real Estate Year-In-Review”

I looked at that Manchester house. It was in rough… REALLY rough shape. But, the potential was obvious, and it sits on an amazing lot. Still, I thought it’d go in the $500–550k range. Pretty crazy considering they (presumably) paid cash.

I should be happy to own in such a hot market, but I’m just as concerned I could unwittingly be living in a more exclusive neighborhood than I’d ever imagined. I’m sure it will settle nicely in the middle soon enough.

I’d like to respectfully point out that comparing average sale price in January to average sale price in November is not a good way to evaluate real estate price trends. Even looking at monthly averages year-over-year (ie, Jan 2012 to Jan 2011) is bad statistics, since there are generally not enough sales in a single month to get a good snapshot of the real market. A couple big (or small) sales can easily skew your data. Not to mention seasonality, which is extremely important when crunching numbers on property values.

Far better to use moving averages to evaluate home price trends. For example, if you look back at the previous, say 30 or 60 sales, at any given point, you can construct a trendline that will show the price trend for a given neighborhood or zip code.

Using a 60-day average, which in this case is the average sale price over the past 5 months or so, prices rose in the 94110 zip (which includes Bernal and the Mission) 14.9%. This isn’t too far off from the numbers above, and while it does include the Mission which is certainly a different area, the analysis is more sound from a statistical standpoint.

Where there’s a boom there’s a bubble. It happened in 1989-1992 when home prices crashed by 20% after the Loma Prieta quake. It happened in the early 2000s when the dot-com boom turned into a bust. And of course it happened a few years ago, too. It WILL happen again. When prices run up THIS dramatically it’s clear that the bubble is about to pop.

I hope they pop bubble and flood so people who dont make the trash bags full of new tech money can live here, the place artist, teachers, nurses, non-profit etc once lived and brought the soul and diversity to the hill. I’ve watched this neighborhood go from community and family to individuals and investors. Hope the bubble pops to the point people from Alemany pubic housing can afford to stay in the once diverse community of Bernal